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TICKERS: VRNA; VRP

Biotech Co. Positioned for Ensifentrine Approval, Analyst Says
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According to a Jefferies & Co. research note, Verona Pharma Plc. has a 90-95% probability of success for PDUFA approval.

Jefferies & Co. analyst Andrew Tsai, in a research report published on May 2, 2024, reiterated his confidence in the approval of Verona Pharma Plc.'s (VRNA:NASDAQ; VRP:LON) ensifentrine, a novel PDE3/4 nebulizer for the treatment of chronic obstructive pulmonary disease (COPD), by its June 26 PDUFA date. The analyst believes that ensifentrine could open up a US$1B+ peak sales opportunity in COPD.

Tsai also highlighted a recent development regarding Regeneron's Dupixent, an injectable IL-4/IL-13 inhibitor for COPD, which could potentially face a 3-month delay in its June 27 PDUFA date.

"We learn injectable Dupixent's June 27th PDUFA (a day after Ensi's action date) could be delayed by three months as the FDA is requiring some add'l Phase III analyses - a development that actually could have (+) readacross to Ensi's approvability," Tsai stated.

The FDA has requested additional analyses from Regeneron regarding subpopulations of the pivotal Phase 3 BOREAS/NOTUS studies, with responses due by the end of May.

"Our understanding is the FDA is assessing a new class of biologics in COPD and wants to ensure there is no study subpopulation that could be driving Dupi's efficacy benefit," Tsai explained.

The analyst sees an incrementally positive readthrough to ensifentrine and remains confident in its approval by June 26.

"We know the PDUFA dates of Ensi/Dupi are one day apart (so the FDA is reviewing both applications at the same time). As such, if the FDA had a similar issue with Ensi, we think VRNA would have already disclosed some type of news by now, since a pot'l approval delay would seem more material/urgent to disclose for a SMID-cap player (vs Big Pharma). The fact that we have not heard anything from VRNA reassures us about the review (no news is good news)," Tsai noted.

Tsai also pointed out that ensifentrine is a standard/traditional nebulizer, whereas Dupixent could be the first biologic approved for COPD, fitting into the standard-of-care differently. The FDA has indicated no AdCom for ensifentrine on at least two occasions, suggesting that the agency has no real issues with the drug's study design and clinical data.

The analyst highlighted that Verona Pharma has conducted various Phase 3 data analyses, presented at various medical conferences, that suggest no real efficacy differential by subgroup, irrespective of background medication use, ICS use, presence of chronic bronchitis, baseline smoking status, baseline blood eosinophils, or recent history of exacerbation rate and risk.

Tsai emphasized that ensifentrine can be combined with other later-stage COPD drugs in development, which are all biologics and have broader applicability, working irrespective of eosinophil count and smoking status.

"Also, our understanding is some of the IL-5s do not necessarily show a significant benefit in efficacy (e.g., FEV1), which may in part be contributing to the FDA's request on add'l Dupi analyses (perhaps to better understand the biologics class overall in COPD)," Tsai added.

The analyst maintained a Buy rating on Verona Pharma, with a price target of US$38.00, representing a potential upside of 150% from the price at the time of the report of US$15.22. Tsai's valuation is based on a US$3B valuation, derived from US$1B peak sales, a 3x multiple, and a 90-95% probability of success.


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Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Verona Pharma Plc. 
  2.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 
  3. This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

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Disclosures for Jefferies & Co. Verona Pharma Plc., May 2, 2024

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